US dollar heads higher helped by housing sector sentiment

[NEW YORK] The dollar headed higher Monday, notching its third straight gain versus the euro, helped by improving confidence in the US housing sector.

The greenback rose to US$1.1078 per euro, and to 124.41 yen, the latter hit only slightly by Monday's data showing that the Japanese economy contracted 0.4 per cent in the second quarter.

The dollar, which also improved to US$1.5586 per pound, gained strength as the construction sentiment index of the US National Association of Home Builders rose to a new high since the recession ended in 2009.

In addition, the separate Empire State Manufacturing Survey, covering business in the New York area, showed an improvement in medium-term expectations for the economy even if the views of current conditions fell.

"With Europe essentially flat-lining and Asia now experiencing negative year-over-year growth, the US remains the only region in the world that shows any growth at all," said Boris Schlossberg of BK Asset Management.

The Chinese yuan remained in a holding pattern at about 6.3949 per dollar, virtually unchanged from Thursday, after the August 10 shock devaluation and the Bank of China's announcement it was loosening its controls on the currency's trading range.

AFP